Seitz v. Mark-O-Lite Sign Contractors, Inc.
210 N.J. Super. 646, 510 A.2d 319 (1986)
Rule of Law:
The illness of a specific employee does not excuse a company's contractual performance under the doctrine of impossibility unless the contract specifically requires performance by that particular person or the duties are of such a personal and non-delegable nature that performance by another is not possible. Subjective impossibility, such as economic infeasibility, is not a valid defense for non-performance.
Facts:
- George Seitz was awarded a general contract to renovate the Strand Theater, a project which included the restoration of a neon sign marquee.
- Seitz had discussions with Mark-O-Lite Sign Contractors, Inc. about performing the required sign work.
- On April 18, 1984, Seitz and Mark-O-Lite executed a contract for the sign work for a total price of $12,800, which contained a force majeure clause.
- A few days after the contract was signed, Mark-O-Lite's expert sheet metal worker, Al Jorgenson, who was the only employee capable of performing the specialized work, was hospitalized due to complications from diabetes.
- Mark-O-Lite informed Seitz that it could not perform the work as a result of Jorgenson's illness.
- Mark-O-Lite determined it would be economically infeasible to hire another company to do the work, as quotes from other companies ranged from $18,000 to $20,000.
- Mark-O-Lite returned Seitz's uncashed deposit check.
- Seitz subsequently contracted with City Sign Service, Inc. to perform the necessary work for $20,000.
Procedural Posture:
- George Seitz filed a complaint against Mark-O-Lite Sign Contractors, Inc. in the Superior Court of New Jersey, Law Division, seeking damages for breach of contract.
- The parties agreed to a bench trial and submitted the case to the court for determination based on a set of stipulated facts.
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Issue:
Does the illness of a defendant's sole expert employee constitute impossibility of performance sufficient to excuse a breach of contract, where the work could be delegated to a subcontractor, albeit at a higher cost?
Opinions:
Majority - Milberg, A.J.S.C.
No, the illness of a defendant's sole expert employee does not constitute impossibility of performance where the work is delegable. First, the force majeure clause in the contract does not excuse performance. Applying the rule of ejusdem generis, the employee's progressive illness is not of the same class as the specifically listed events like strikes, fires, floods, or acts of God. Second, the common law defense of impossibility (or impracticability) requires that performance be objectively impossible, meaning 'the thing cannot be done.' This defense applies to personal service contracts where a particular person's unique skill is necessary for performance. Here, the contract was for sign construction, not for the personal services of Al Jorgenson, and the work was delegable, as evidenced by the defendant's own attempt to subcontract it. The defendant's inability to perform is a case of subjective impossibility ('I cannot do it'), which is not a valid excuse. The fact that subcontracting would render the contract unprofitable is also not a defense, as increased cost or unforeseen difficulty does not discharge a contractual duty. Defendant's letter and return of the deposit constituted an anticipatory repudiation, justifying the plaintiff's decision to hire another contractor and sue for damages.
Analysis:
This decision provides a clear application of the distinction between objective and subjective impossibility in contract law. It reinforces the principle that the impossibility defense is narrowly construed, particularly in commercial contexts. The ruling establishes that for a corporate entity to be excused from performance due to an employee's incapacity, the contract must be for that specific individual's personal and non-delegable services. This case serves as a strong precedent against using economic hardship or internal resource limitations as a shield for what is ultimately a breach of contract.
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